I can relate to your problem, as I don't even have 1/8th the space I had in my sewing "room" before we had to move from a 3-bedroom home with full basement to a 2-bedroom apt. where my sewing area is about 6 feet. Get a good table for your sewing machine, a place to cut fabric and if you are fortunate enough a large folding table to use for sandwiching quilts. I still have some work to do, but I wish I had one of those labeling machines, instead I used large 4x6 index cards to write what was in each box, and it goes a long ways toward finding things and I really try to put everything back when I'm finished with it. But I've found that clear plastic "boxes" large enough to hold quilt magazines but about 6" high have been the best for storing things. I have clear shoe boxes for thread and lots of other smaller items, which work great. Start with a clean slate, try to map out your space and go from there. Lucky girl to have your own sewing room.